The LCR Audit and Governance Committee met on Thursday, 26 March 2026, to review internal audit updates, planning for the upcoming year, risk management reports, accounting policies, and the committee's own effectiveness. Key decisions included the approval of the internal audit plan for 2026-27, the internal audit charter, and the internal audit strategy, alongside noting the risk management annual report and approving accounting policies for 2025/26. The committee also agreed on an action plan to enhance its effectiveness.

Internal Audit Update

Laura Williams, Head of Internal Audit and Risk, presented an update on internal audit work completed in the fourth quarter of 2025-26. Four audits were completed, with one piece of advice and guidance provided. The SIF Scheme – Littlewoods Refurbishment Project audit received a moderate opinion due to identified control weaknesses, particularly concerning project governance, risk management, documentation, and compliance with the Local Assurance Framework. Recommendations included developing and maintaining project risk registers, providing evidence for multiple commissions, establishing robust documentation retention systems, and implementing a clear process for re-evaluating project viability. The Bus Franchising and MyHR Officer Interface audits received minor opinions, and the Woodside Ferry Terminal Landing Stage audit received a negligible opinion.

The committee noted that 182 high and medium priority recommendations had been implemented since April 2025. However, there were concerns regarding 6 high-priority and 30 medium-priority recommendations that were either overdue or had had their implementation dates extended more than twice. A panel was being convened to provide support and challenge to officers in implementing these recommendations. Councillor Graham Morgan, Leader of Knowsley Council and Cabinet Member for Housing and Strategic Planning, suggested that officers responsible for outstanding recommendations should be required to present their cases to the committee to explain delays.

Internal Audit Planning 2026-27

Laura Williams also presented the Internal Audit Plan, Charter, and Strategy for 2026-27. The plan was developed using a risk-based approach, informed by consultations with senior leaders and a review of corporate and service risk registers. Key areas of focus for the upcoming year include corporate governance and ethical standards, key financial systems, human resources, cyber risk assurance, integrated settlement implementation, various schemes, bus franchising, adult skills, housing, procurement, and counter-fraud. The plan is designed to be flexible to accommodate emerging risks. The committee was asked to approve these planning documents.

Councillor Chris Cooke, a member of the committee, highlighted that two corporate risks, Environment and Transport, had residual scores of 20, indicating a high level of risk. Laura Williams explained that residual scores represent the risk remaining after controls have been applied, and that the Corporate Risk Register update would detail actions being taken to further reduce these scores.

Risk Management Annual Report 2025-26

The Executive Director for Resources presented the Risk Management Annual Report for 2025-26. The report detailed activities undertaken to embed an effective system of risk management, including training, updates to the Risk Management Policy and Handbook, and a focus on fraud risk assessment. The report highlighted that the refreshed Risk Management Policy and Handbook introduced an approach to risk appetite, which is a key feature of good risk management practice. The Corporate Risk Register identified six key corporate risks: Accountability, Resilience, Environment, Transport, Economic Prosperity, and Financial Sustainability. Councillor Graham Morgan noted the stable position of the Corporate Risk Register and welcomed progress on recruitment capacity for transport and bus franchising.

Accounting Policies 2025/26

Claire Hall, Director of Finance, presented the proposed accounting policies for 2025/26. The report detailed a minor adjustment to the accounting policies to reflect updated guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) regarding the valuation of non-investment assets. Moving forward, assets will be annually indexed between full revaluations every five years to keep pace with inflation. The committee was asked to note and approve these policies.

Effectiveness Review 2026

Louise Outram, Chief Legal and Monitoring Officer, presented the findings of the effectiveness review of the Audit and Governance Committee. The review, based on CIPFA guidance, concluded that the committee's Terms of Reference were reflective of best practice, with the only area not yet considered being code of conduct/standards matters, for which there had been no reported issues. The committee acknowledged the importance of independent members and expressed a desire for two independent members with diverse professional backgrounds. Members also highlighted the value of pre-meeting briefings and engagement with external officers, and requested specific training sessions, particularly for new members. The committee agreed that they had worked on a non-party political basis, which was considered a strength. An action plan was presented to inform the committee's workplan for 2026/27, including recruiting two new independent members and revisiting the review process on a six-monthly basis.

The committee resolved to agree the recommendations set out in the reports for items 4, 5, 6, 7, and 8.